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I really appreciate your constant LIDAR analysis in these posts. I always expect to see a comment from you when posts are about self driving or lidar advancemen

by pests 6y ago

I really appreciate your constant LIDAR analysis in these posts. I always expect to see a comment from you when posts are about self driving or lidar advancements.

Animats 6y ago
I'm all in favor of LIDAR, but I don't see what makes this company worth $3.4 billion as a public company. The investors are putting in $570 million. Here's a list of the top players in automotive LIDAR: Delphi Automotive, Continental, ZF Friedrichshafen, Infineon Technologies, Velodyne Lidar, Texas Instruments Incorporated, First Sensor.[1] Not seeing Luminar on that list. Their 2022 product seems to be yet another rotating scanner. 120 degree horizontal field of view, 30 degree vertical. Possibly with some steering on the vertical axis to deal with hills. Nice renders of the packaging. Why is this worth $3.4 billion? There are lots of other cheap LIDAR real soon now companies. Quanergy. LeddarTech. InnoViz. Continental bought Advanced Scientific Concepts, which had expensive solid-state LIDAR working well. Continental put that product on hold because nobody wanted to order a few hundred thousand of them. Continental is an auto parts maker, and they do volume products only. They will sell you an expensive prototype if you want one. Delphi seems to be taking a similar position. [1] https://www.marketwatch.com/press-release/lidar-for-automotive-market-potential-growth-share-demand-and-analysis-of-key-players-research-forecasts-to-2026-2020-08-13 https://www.marketwatch.com/press-release/lidar-for-automoti...
- pests 6y ago
  I have definitely noticed a bias towards Continental in a lot of your posts. Do you really think they have a leg up on the industry?
  - Animats 6y ago
    I liked the Advanced Scientific Concepts technology when I first saw it in 2003 or 2004 in Santa Barbara, when it was on an optical bench. No rotating machinery. A later version is used by Space-X to dock the Dragon spacecraft with the ISS. Their device was very expensive because it required custom ICs made using an unusual InGaAs process. But that's the kind of thing that becomes cheap when production gets into millions. Continental is an auto parts manufacturer, where every penny per part is carefully counted. If they thought they could get the cost down in volume, they probably could. But no market appeared. Continental appears to be able to make the things; they have demoed and offer a prototype. Setting up an assembly line to bang them out has to wait for a big order. Automatic driving isn't far enough along to generate such orders. Which is the big problem in all this. Nobody needs a million LIDARs yet.
- choppaface 6y ago
  Agree with you that it looks odd. Strikes me like a scramble to compete with the Velodyne-GRAF deal. From the Luminar SEC filing[1]: * Volvo and one other OEM are main customers * $15m in revenue this year. Claimed $837m revenue in 2025. Sounds like when Uber ordered 100,000 S-Classes for ATG. [2] In contrast, Velodyne was at $100m last year, yet has only projected to $600m for 2024 [3]. * Will not make 1,000 sensors per year until 2023. * Today, Luminar claims the TAM for their market is $4B. So the $3.4B valuation suggests they somehow have already captured a majority of their market. Well, they certainly captured a majority of their own deal with Volvo. The sensors have some great performance, but the economics look like pure information arbitrage. [1] https://www.sec.gov/Archives/edgar/data/1758057/000119312520227521/d944036d425.htm https://www.sec.gov/Archives/edgar/data/1758057/000119312520... [2] https://www.roadandtrack.com/car-culture/news/a28508/uber-orders-100000-mercedes-benz-s-class-sedans-report/ https://www.roadandtrack.com/car-culture/news/a28508/uber-or... [3] https://www.forbes.com/sites/sabbirrangwala/2020/07/22/the-first-pure-play-lidar-ipowill-velodyne-dominate-3d-imaging/#3b023056597d https://www.forbes.com/sites/sabbirrangwala/2020/07/22/the-f...
- Animats 6y ago
  There's another problem with this. In the end, they're an auto parts company. Auto parts companies get hammered on price by automakers. Hard. They do not get to have high margins. Silicon Valley companies are used to being able to sell things with essentially no warranty. Here's what a major auto company demands of its suppliers: "Seller warrants and guarantees that the goods covered by this Contract will conform to all specifications, drawings, samples, descriptions and quality standards (i) furnished by Buyer, or (ii) furnished by Seller and approved by Buyer in writing, and will be merchantable, of good material and workmanship and free from defect. In addition, Seller acknowledges that Seller knows of Buyer’s intended use of the goods covered by this Contract and warrants and guarantees that such goods have been selected, designed, manufactured or assembled by Seller based upon Buyer's stated use and will be fit and sufficient for the particular purposes intended by Buyer. Unless otherwise set forth in this Contract, the duration of the warranty provided by Seller to Buyer for the goods will begin on the date of receipt of the goods by Buyer and end on the later of ... (b) expiration of any warranty applicable to the goods provided by Buyer to Buyer’s end customer for the vehicle into which the goods are incorporated.[1] Yes, the parts supplier is on the hook for warranty costs during the warrantied life of the vehicle. Oh, and as to liability: In the event that any goods fail to conform to the warranties set forth in this Contractor the product specifications incorporated by reference in this Contract, or if Seller otherwise breaches any of its obligations under this Contract, Buyer will be entitled to recover from Seller any and all damages, including, without limitation, any direct, indirect, incidental and consequential damages and all legal and other professional fees and costs incurred by Buyer as a result of such breach or failure, including, without limitation, costs, expenses and losses incurred by Buyer ... Right. If a LIDAR failure causes a car crash, the supplier pays. Everything. Complete reverse of typical Silicon Valley terms. There's a lot more like that, and it's all in favor of the buyer, the auto company. [1] https://www.butzel.com/assets/htmldocuments/GM%20General%20Terms%20and%20Conditions%20February%202014.PDF https://www.butzel.com/assets/htmldocuments/GM%20General%20T...

by pests 6y ago

I really appreciate your constant LIDAR analysis in these posts. I always expect to see a comment from you when posts are about self driving or lidar advancements.

Animats 6y ago

I'm all in favor of LIDAR, but I don't see what makes this company worth $3.4 billion as a public company. The investors are putting in $570 million. Here's a list of the top players in automotive LIDAR: Delphi Automotive, Continental, ZF Friedrichshafen, Infineon Technologies, Velodyne Lidar, Texas Instruments Incorporated, First Sensor.[1] Not seeing Luminar on that list. Their 2022 product seems to be yet another rotating scanner. 120 degree horizontal field of view, 30 degree vertical. Possibly with some steering on the vertical axis to deal with hills. Nice renders of the packaging. Why is this worth $3.4 billion? There are lots of other cheap LIDAR real soon now companies. Quanergy. LeddarTech. InnoViz. Continental bought Advanced Scientific Concepts, which had expensive solid-state LIDAR working well. Continental put that product on hold because nobody wanted to order a few hundred thousand of them. Continental is an auto parts maker, and they do volume products only. They will sell you an expensive prototype if you want one. Delphi seems to be taking a similar position. [1] https://www.marketwatch.com/press-release/lidar-for-automotive-market-potential-growth-share-demand-and-analysis-of-key-players-research-forecasts-to-2026-2020-08-13 https://www.marketwatch.com/press-release/lidar-for-automoti...

pests 6y ago
I have definitely noticed a bias towards Continental in a lot of your posts. Do you really think they have a leg up on the industry?
- Animats 6y ago
  I liked the Advanced Scientific Concepts technology when I first saw it in 2003 or 2004 in Santa Barbara, when it was on an optical bench. No rotating machinery. A later version is used by Space-X to dock the Dragon spacecraft with the ISS. Their device was very expensive because it required custom ICs made using an unusual InGaAs process. But that's the kind of thing that becomes cheap when production gets into millions. Continental is an auto parts manufacturer, where every penny per part is carefully counted. If they thought they could get the cost down in volume, they probably could. But no market appeared. Continental appears to be able to make the things; they have demoed and offer a prototype. Setting up an assembly line to bang them out has to wait for a big order. Automatic driving isn't far enough along to generate such orders. Which is the big problem in all this. Nobody needs a million LIDARs yet.
choppaface 6y ago
Agree with you that it looks odd. Strikes me like a scramble to compete with the Velodyne-GRAF deal. From the Luminar SEC filing[1]: * Volvo and one other OEM are main customers * $15m in revenue this year. Claimed $837m revenue in 2025. Sounds like when Uber ordered 100,000 S-Classes for ATG. [2] In contrast, Velodyne was at $100m last year, yet has only projected to $600m for 2024 [3]. * Will not make 1,000 sensors per year until 2023. * Today, Luminar claims the TAM for their market is $4B. So the $3.4B valuation suggests they somehow have already captured a majority of their market. Well, they certainly captured a majority of their own deal with Volvo. The sensors have some great performance, but the economics look like pure information arbitrage. [1] https://www.sec.gov/Archives/edgar/data/1758057/000119312520227521/d944036d425.htm https://www.sec.gov/Archives/edgar/data/1758057/000119312520... [2] https://www.roadandtrack.com/car-culture/news/a28508/uber-orders-100000-mercedes-benz-s-class-sedans-report/ https://www.roadandtrack.com/car-culture/news/a28508/uber-or... [3] https://www.forbes.com/sites/sabbirrangwala/2020/07/22/the-first-pure-play-lidar-ipowill-velodyne-dominate-3d-imaging/#3b023056597d https://www.forbes.com/sites/sabbirrangwala/2020/07/22/the-f...
Animats 6y ago
There's another problem with this. In the end, they're an auto parts company. Auto parts companies get hammered on price by automakers. Hard. They do not get to have high margins. Silicon Valley companies are used to being able to sell things with essentially no warranty. Here's what a major auto company demands of its suppliers: "Seller warrants and guarantees that the goods covered by this Contract will conform to all specifications, drawings, samples, descriptions and quality standards (i) furnished by Buyer, or (ii) furnished by Seller and approved by Buyer in writing, and will be merchantable, of good material and workmanship and free from defect. In addition, Seller acknowledges that Seller knows of Buyer’s intended use of the goods covered by this Contract and warrants and guarantees that such goods have been selected, designed, manufactured or assembled by Seller based upon Buyer's stated use and will be fit and sufficient for the particular purposes intended by Buyer. Unless otherwise set forth in this Contract, the duration of the warranty provided by Seller to Buyer for the goods will begin on the date of receipt of the goods by Buyer and end on the later of ... (b) expiration of any warranty applicable to the goods provided by Buyer to Buyer’s end customer for the vehicle into which the goods are incorporated.[1] Yes, the parts supplier is on the hook for warranty costs during the warrantied life of the vehicle. Oh, and as to liability: In the event that any goods fail to conform to the warranties set forth in this Contractor the product specifications incorporated by reference in this Contract, or if Seller otherwise breaches any of its obligations under this Contract, Buyer will be entitled to recover from Seller any and all damages, including, without limitation, any direct, indirect, incidental and consequential damages and all legal and other professional fees and costs incurred by Buyer as a result of such breach or failure, including, without limitation, costs, expenses and losses incurred by Buyer ... Right. If a LIDAR failure causes a car crash, the supplier pays. Everything. Complete reverse of typical Silicon Valley terms. There's a lot more like that, and it's all in favor of the buyer, the auto company. [1] https://www.butzel.com/assets/htmldocuments/GM%20General%20Terms%20and%20Conditions%20February%202014.PDF https://www.butzel.com/assets/htmldocuments/GM%20General%20T...